KUALA LUMPUR, Nov 8 — The proposed increase in taxes and fees on the gaming industry announced in the 2019 Budget, especially the hike in casino duties, is credit negative for Genting Bhd, said Moody’s Investors Service.
The international rating agency said the earnings contribution from Genting’s Malaysian leisure and hospitality segment would fall and consequently weaken the group’s leverage.
“We expect Genting’s earnings before interest, taxes, depreciation and amortisation to decline by around RM650 million in 2019 under a stressed scenario, where the 10-percentage point increase in casino duties on gaming revenue starts from Jan 1, 2019.
“The decline will erode the likely initial gains the group will achieve in 2019 following the completion of its Genting Integrated Tourism Plan at Resorts World Genting, Malaysia’s sole land-based casino,” said Moody’s.
Genting, which has Moody’s’ Baa1 stable rating, currently pays casino duties of up to 25 per cent on gaming revenue.
Genting Malaysia Bhd, which is 49.5 per cent owned by Genting Bhd, announced yesterday that it was assessing the full implications of the additional taxes and would take the appropriate next course of action, including a review of its marketing expenditure and cost structure, to mitigate the impact of the tax increases.
As of 4.05pm, Genting shares on Bursa Malaysia gained one sen to RM6.75 with 13.21 million shares changing hands. — Bernama
